Money trail leads to one conclusion

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The Volcker inquiry built its case against the head of the
oil-for-food program by examining telephone, bank and travel
records to track the money trail between oil contracts and the
program's executive director, Benon Sevan.

Bank account records show that Mr Sevan was in a "precarious"
financial position when he took the job in October 1997.

He had a tax-free salary of $US129,524 ($A169,527), while his
wife, who also worked at the UN, had a tax-free salary of
$US69,243.

They owned a house on Long Island and rented an apartment in
Manhattan for $US4370 a month. They repaid $US2767 a month on other
debts and loans.

The value of Mr Sevan's share portfolio had fallen from
$US180,000 to $US84,163 in a couple of years. His cheque account
was overdrawn 153 times in less than two years.

But by the end of 1998, when oil allocations to a company called
AMEP began, his financial position improved. In December, Mr Sevan
deposited $US9800 in cash into his bank accounts. Over the next
three years $US147,184 in cash was deposited into those accounts,
usually in $100 bills.

Mr Sevan claimed the money came from an elderly relative in
Cyprus, but the UN inquiry found she was living in a modest house
on a small pension. The timing of the deposits also rarely
coincided with when she visited New York.

But they did establish a pattern between Mr Sevan's trips to
Geneva and deposits into his account. By tracing phone calls
between Mr Sevan, AMEP, the oil company that received allocations
from Iraq, and two of its employees, the inquiry built a picture of
money deposited then withdrawn from a Swiss bank account, and
subsequent deposits in banks in New York.

In all, AMEP, which made a profit of $US1.5 million on the oil
allocations, paid $US579,669 into the Swiss bank account,
controlled by a friend of Mr Sevan's, Fred Nadler, whose telephone
records indicate he was an intermediary between Mr Sevan and AMEP
's Fakhry Abdelnour.

Mr Nadler withdrew $US432,983 from the Swiss bank on dates that
coincided with times when Mr Sevan or Mr Nadler were in Geneva and
returning soon to New York.

The inquiry, which does not have the power to prosecute, made
findings based on a "reasonable sufficiency" of evidence, a lower
standard than required for criminal prosecution. Several US
prosecution authorities are looking into Mr Sevan's activities. His
whereabouts are unknown, but there have been reports he is in
Cyprus, which does not have an extradition treaty with the US.